SR&ED Program: (Scientific Research and Experimental Development) Should You Apply? Douglas Clay, Research & Technology Advisor
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1 SR&ED Program: (Scientific Research and Experimental Development) Should You Apply? Douglas Clay, Research & Technology Advisor
2 What is the SR&ED Program? a tax incentive program to encourage Canadian businesses* of all sizes to conduct R&D that will lead to new or improved technologically advanced products or processes. * business or individual claimants (a tax payer - not necessarily a payer of tax)
3 Topics SR&ED Program Overview What it is? What it is not? Criteria for Judging Eligibility Routine Engineering... versus SR&ED What do you need to apply? What might you expect? Questions and Answers
4 Available since 1985 Overview Single largest government support for science and technology in Canada One of the world s best taxbased incentive programs Entitlement program, not a grant CANADA REVENUE AGENCY ALL OTHER DEPARTMENTS Small companies CA$H Refund Large companies Tax Credit
5 Grant vs Entitlement Funding SR&ED Investment Tax Credit R&D broadly based Demand program - no limit on program spending Non competitive Eligibility defined in law
6 What Is SR&ED? The Definition Systematic investigation or search carried out in an eligible field of science or technology through experiment or analysis Income Tax Act, Sect. 248(1)
7 What Is Not SR&ED? Market research or sales promotion Quality control or routine testing Research in social sciences or humanities Prospecting, exploring, drilling for or producing minerals, petroleum or natural gas Commercial production or use of a new or improved material, device or product Style changes Routine data collection
8 Categories of SR&ED 1. Basic research 2. Applied research 3. Experimental development for achieving scientific or technological advancement 4. Support work for 1, 2 or 3
9 Factors Affecting Eligibility The 2 Minute Version
10 Product or Process Development Conceptualization Problem Definition Feasibility Study Literature Review Design Manufacturing Focus Compliance Standards Commercial Model
11 Research & Development (S/T Uncertainty) SR&ED Question (S/T Advancement) Hypothesis y=? y=x 2 Literature Review (S&T Content) Systematic Experimentation Design Experimental Prototype / Pilot Plant
12 Research Conceptualization & Development SR&ED PROJECT 1) Advancement resolving 2) Uncertainty by 3) Experimentation Problem Definition Feasibility Study Literature Review Design Manufacturing Focus Compliance Standards Commercial Model
13 What Do You Need? Documentation & Evidence Dated* documents of: Original project goals The progress of the work How work was carried out Results & conclusions Other evidence (e.g., samples, pictures, etc.) * Documents created during the R&D process
14 What might affect your claim? SR&ED program provides refund of eligible expenses incurred during the claim period Nationally we process over 18,000 claims ($4B), the prairie region makes up over 10% of all claims Time for refund can vary from 4 to 12 months, service can be faster if the claim is Accepted as Filed Project description clearly written with the required information can speed processing
15 Should you apply for SR&ED? DO You Conduct SR&ED activities yourself? Do collaborative SR&ED with local partners? Contract others (in Canada) to solve your SR&ED problems? need assistance for research activities if so YES please request a PCPR
16 Discussion Questions / Answers Web site: Inquiry Line: (403)
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